Fiduciary relationships outside trust

Fiduciary relationships extend beyond express trusts to company directors, solicitors, agents, and partners who have undertaken to act for another in circumstances giving rise to trust and confidence (Bristol and West Building Society v Mothew [1998] Ch 1). Two strict prophylactic rules apply: (1) the no-conflict rule — a fiduciary must not place himself where duty and interest conflict or may conflict; (2) the no-profit rule — a fiduciary must not profit from his position without informed consent. Both operate regardless of honesty, good faith, or absence of loss to the principal (Regal (Hastings); Boardman v Phipps). The rationale is deterrence: equity removes temptation by making breach unprofitable, recognising the difficulty of policing fiduciary conduct.

Keech v Sandford (1726) Sel Cas Ch 61: Trustee took renewal of lease after landlord refused to renew to infant beneficiary; held liable to assign lease despite acting honestly. Establishes strict no-profit rule applies 'however honest' the conduct.

Boardman v Phipps [1967] 2 AC 46: Solicitor used information from fiduciary position to purchase shares; liable to account despite benefiting trust. Shows mere possibility of conflict suffices; good faith irrelevant to liability.

Bristol and West Building Society v Mothew [1998] Ch 1: Millett LJ defined fiduciary as someone who 'has undertaken to act for or on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence'. Distinguishes breach of fiduciary duty (disloyalty) from breach of non-fiduciary duty of care.

FHR European Ventures LLP v Cedar Capital Partners LLC [2014] UKSC 45: Secret commission received by agent held on constructive trust for principal. Overruled Lister v Stubbs; aligns English law with Commonwealth approach granting proprietary remedies for bribes.

Courts first determine whether relationship is fiduciary by checking: (1) established categories (trustee, director, solicitor, agent, partner) which are fiduciary per se; or (2) ad hoc analysis examining whether defendant undertook to act in another's interest with discretion affecting that person's interests (Hospital Products). Next, identify scope of fiduciary relationship — duties only bind within that scope. Then apply no-conflict/no-profit rules strictly: any unauthorised benefit or potential conflict triggers liability regardless of good faith. Check for defences: informed consent (must be full disclosure), or authorisation under Companies Act 2006 ss.175-177 for directors. Remedies: account of profits (personal), constructive trust for bribes/secret commissions (FHR), possible equitable allowance for honest skill/effort.

Assuming all professionals are fiduciaries: Doctors, accountants, employees owe duties of care but aren't automatically fiduciaries (Nottingham University v Fishel). Need additional factors like control over property or discretion affecting legal interests. Confusing dishonesty requirement: Liability is strict — good faith irrelevant to liability (Regal, Boardman). Honesty only relevant to remedies like equitable allowance. Missing scope limits: Fiduciary duties only apply within relationship scope; agent can compete outside agency (Imageview Management). Misapplying remedies post-FHR: Bribes get constructive trust, but not all breaches create proprietary claims — distinguish misappropriation cases from pure conflict/profit cases.